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receipts with appropriate adjustments
for any non-taxable sales.
Jeopardy Assessments
Connecticut General Statutes 12-
417(1) provides:
Jeopardy assessment. Notice.
If the commissioner believes that
the collection of any tax or any
amount of tax required to be col-
lected and paid to the state or of
any assessment will be jeopard-
ized by delay, the commissioner
shall make an assessment of the
tax or amount of tax required to be
collected, noting that fact upon the
assessment and serving written
notice thereof, personally or by
mail, in the manner prescribed for
service of notice of a deficiency
assessment, on the person
against whom the jeopardy
assessment is made. Ten days
after the date on which such
notice is served on such person,
such notice shall constitute a final
assessment except only for such
amounts as to which such person
has filed a written petition for
reassessment with the commis-
sioner, as provided in subdivision
(3) of this section.
Thus, the issuance of a jeopardy
assessment reduces the window of
time a taxpayer has to appeal from 60
days to 10 days, placing a significant
burden on taxpayers and their repre-
sentatives to quickly file an appeal to
maintain their rights. It also allows the
commissioner to file a lien on the tax-
payer's assets immediately, even
before the taxpayer's appeal is heard.
In its analysis, the court stated that,
although the commissioner has the
authority to issue jeopardy assess-
ments, the analysis must include
"whether there was a reasonable or
rational basis for the commissioner to
act against the plaintiff."
The taxpayer was in business for 14
years, owned multiple pieces of real
estate, and sat on a number of commu-
nity boards. At the time the exam was
conducted, it was the DRS's policy,
whenever the auditor determined a
substantial amount of unreported
sales, to extend the examination period
beyond the three-year statute of limita-
tions, impose a fraud penalty (which
allows an assessment beyond the nor-
mal three-year statute), and issue a
jeopardy assessment. Presumably, the
reason for the jeopardy assessment
was that if a taxpayer filed fraudulent
returns, he or she would be likely to
abscond without paying the tax liability.
Concluding there was no basis for the
DRS auditor to believe the taxpayer
paid advertisement
Connecticut Supreme Court Upholds
Business Recordkeeping Requirements
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